Google's YouTube in Lions Gate film clips deal

BEVERLY HILLS, California (Reuters) - In a move that signals a possible thawing of Google Inc’s (GOOG.O) relations with Hollywood, its YouTube unit has reached a deal to feature film clips from Lions Gate Entertainment Inc LGF.N on the video-sharing site.

Google Chief Executive Eric Schmidt announced the deal at an Ad Age/William Morris Agency conference on Wednesday and said it would give viewers access to scenes from their favorite Lions Gate movies, accompanied with ads.

Lions Gate later confirmed the deal.

“There are things in our library like ‘Dirty Dancing’ that have been watched tens of millions of times and it will be nice to get paid for that and to set viewers in the direction of buying movies,” Lions Gate Vice Chairman Michael Burns said in a phone interview.

Lions Gate, also home to the popular “Saw” horror movies and Oscar winner “Crash,” would appear to be taking more of an “if you can’t beat ‘em, join ‘em” approach towards YouTube.

This is in sharp contrast to media giant Viacom Inc VIAb.N, owner of Paramount and MTV Networks, which has sued Google and YouTube for $1 billion, accusing them of copyright infringement by enabling unauthorized viewing of its shows like “The Daily Show” and “The Colbert Report.”

“Lions Gate is the next interesting example of (a company) trying to get the people who are fans on the Internet and monetize it,” Schmidt told reporters.

Burns described the arrangement as a revenue-sharing deal.

“We’ll have advertising around the clips and a link for electronic sell-through,” he said

Jordan Hoffner, director of content partnerships for Google, also at the advertising conference, said the new Lionsgate-branded channel would launch in the near future.

Both Schmidt and Hoffner said their company was talking to other Hollywood studios about striking similar arrangements.

While they would not say which studios were in its sights, Schmidt made it clear Google was not talking with Viacom.

Google and Viacom this week reached a deal to protect the privacy of millions of YouTube watchers during evidence discovery in the copyright infringement case after a federal judge this month ordered Google to turn over YouTube user data to Viacom.

Google said it agreed to provide plaintiffs’ attorneys for Viacom a massive viewership database that blanks out YouTube username and Internet address data that could be used to identify individual video watchers.